Economics for the Global Manager.

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// A Corporation prices its revenues and costs in different currencies and in different denominations and this information is presented in the financial statements. In this context, the following is the pricing of McDonald's Corporation for its different types of revenues and costs. //

McDonald's Corporation is headquartered in the United States of America and is a multinational company. The following are the items of revenue (In Million) for the company and their respective value in relation to currency denomination:

Revenue by the restaurants operated by the company: $18,169.30
Revenue by the restaurants that are franchised: $9,272.00 (McDonald's Annual Report, 2014).

The following are the items of costs (In Million) for the company and their respective value in relation to currency denomination:

Costs by the restaurants operated by the company: $15,288.30
Costs by the restaurants that are franchised: $1,697.30
Selling, general and administrative nature of expenses: $2,487.90
Other operating expense net of income: $18.60 (McDonald's Annual Report, 2014).

In the costs of the restaurants operated by the company, the items of food & paper ($6,129.7 million), salary and other employee benefits ($4,756 million) and other operating expenses including occupancy ($4,402.6 million) are included. The above figures are for the year ending 31st December, 2014 (McDonald's Annual Report, 2014).
The other items of revenue and costs (In Million) are as follows:

Expense of Interest: $ 570
Expense of non operating nature: $ 7
Provision in relation to Income tax: $ 2614 (McDonald's Annual Report, 2014).

The above figures are also for the year ending 31st December 2014. The bifurcation for the figures of revenue is as follows:
(See the table)
The bifurcation is also for the year ending 31st December 2014 (McDonald's Annual Report, 2014).

//A Multinational Corporation receives income from overseas operations because of its business in different parts of the world. In this regard, the following are the overseas activities of McDonald's and their contribution to the parent firm's profits.//
The operations of McDonald's are present in various nations, and it works on the franchise model. The overseas activities of the company help in contributing to the profit of the whole company. Income in the form of rents and royalties from the franchised restaurants are two such foreign operations that contribute to the parent firm's profits. Their contribution in terms of financial figures is as follows:

(Table attached)

As per the figures above, the income from rent has increased from one year to the other (McDonald's Annual Report, 2014). There was an increase of $190.9 million from the year ending December 2012 to December 2013. The rental income had a further increase of $52.3 million from the year ending December 2013 to December 2014. This shows that the rental income from the franchised restaurants has a positive effect on the income of the parent company.
As per the figures above, the income from royalties had observed an increase of $67.8 million from the year ending December 2012 to December 2013. The income had a decrease of $15.3 million from the year ending December 2013 to December 2014. As per the financial analysis of these figures, the royalty income from the franchised restaurants ...